Apple stock continued to tumble Friday, closing at $105.76 — down more than 20 percent from its all-time high of $134.50 earlier this year.
The precipitous drop is in line with dozens of other big-name stocks that have taken a turn for the worse in 2015, but what’s driving the downturn?
Photo: USA Today
The biggest factors behind the stock market’s big tumble are fear of a tech bubble that’s about to burst and a documented slowdown in China’s economy. There’s also talk of a “death cross” for Apple stock (that’s when “a shorter-term moving average bearishly crosses a longer-term moving average,” according to Schaeffer’s Investment Research).
For those who haven’t been keeping track, China has become an increasingly large part of Apple’s business — with Tim Cook saying the country will soon overtake the United States as Apple’s biggest market. But a steady stream of bad economic news out of the Asian country has taken its toll on markets worldwide.
Another possible impact on Apple’s stock price is the fact that more U.S. mobile carriers are abandoning the concept of smartphone subsidies. This could induce customers to hold on to their smartphones for longer rather than upgrading every year, although some have argued the change could actually spur iPhone sales.
Toni Sacconaghi, an analyst at Sanford C. Bernstein, told CNBC today that Apple’s stock will likely continue to underperform so long as iPhone sales stay depressed.
With that said, it’s probably not time for Jony Ive and Tim Cook to start mailing off their CVs to fast food companies just yet — regardless of how amusing a sitcom that scenario could result in.
Apple stock is still showing year-over-year growth, and a report released yesterday reveals that the company’s share of global smartphone sales continues to rise.
Hang tight, AAPL shareholders!
This story has been updated with Apple’s closing stock price.
Via: USA Today
